The S&T group, a global IT consulting, solutions and services provider based in Linz, signed the contract to take over the outright stake in the Kranj-based group on Tuesday, Iskratel has announced.

The Iskratel group, which last year generated EUR 115 million in revenue, has been guaranteed to be able to keep its identity and brand as part of the S&T group.

The release adds that variable purchase prices had also been agreed depending on profit developments in the next three years.

The companies recognise numerous synergies with the takeover, in particular in the development of 5G networks, solutions for industry 4.0, digital transformation of industry verticals and next-generation optical broadband networks.

Opportunities are also seen in the strengthening of the sales network in the Adriatic and Eastern Europe regions, and expansion to Western European markets.

The takeover concludes a year-long search for a strategic partner which, according to Iskratel, will "enable further growth and development and implementation of the long-term business strategy".

Željko Puljić, the CEO of the company employing 900 people and present in more than 50 countries, said that "faster portfolio development and market penetration ... will be fostered through the combined know-how, innovation drive, sourcing and sales network".

S&T CEO Hannes Niederhauser added that the company "expects to gain an advantage by strengthening our 5G product portfolio", and that, due to the synergies, it would be possible to increase Iskratel's earnings by 10% within the next two years.

"With this acquisition, we are positioning ourselves even more strongly for the future in our focus areas of smart factories and train radio for high-speed trains."

S&T employs some 4,900 people and operates in more than 30 countries around the world, as a leading provider of IT services and solutions and supplier of IT systems in Central and Eastern Europe, the release adds.

Commenting on the takeover for the STA, market analyst Lojze Kozole from stock brokerage Ilirika said that Iskratel had made a good deal.

Although financials for 2019 are not yet available, Kozole calculated on the basis of the 2019 figures the company had been sold at a price eight times higher than its EBITDA.

"If the EBITDA trend from the past years continued into 2019, then this is a good price," he said.